When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (MS) – BUY
BUY the Morgan Stanley (MS) November 2021 $95-$98 in-the-money vertical Bull Call spread at $2.70 or best
Opening Trade
11-1-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 37 contracts
If you don’t do options, buy the stock. My target for (MS) next year is $130, up 28%.
It gets better. We just learned that the GDP growth rate plunged in Q3 from a rip-roaring 6% rate to only 2%. What happens next? That 4% wasn’t lost, just deferred into 2022. The rip roaring 6% growth rate returns. That’s why stocks are pushing up to new all-time highs right now.
I’m looking for a 5% growth rate next year as government stimulus spending eventually fades, but a $1.75 trillion rescue package might defer that for another year.
The bull market lives!
It is clear to all that the next big sector to lead the markets will be financials. Whether the Fed tapers this week, next month, or next year, the writing is on the wall. And stocks will start discounting this eventuality TODAY.
Banks love rising interest rates and a 1.58% ten-year US Treasury bond yield, a 5.3% inflation rate, and a coming 6% US GDP growth rate make absolutely no sense at all, even to Jay Powell. I am willing to bet on that.
This position also has enormous support from the 200-day moving average at $85.61
I am therefore buying the Morgan Stanley (MS) November 2021 $95-$98 in-the-money vertical Bull Call spread at $2.70 or best
Don’t pay more than $2.80 or you’ll be chasing.
Morgan Stanley announced blockbuster earnings in October. (MS) is the class act in the brokerage and fund management sector, which I helped personally build out some 40 years ago.
Yes, back then, I got Morgan Stanley into Japan when the Nikkei Average was only at 3,000 on its way to 39,000. The memory still titillates.
I believe that massive government borrowing and spending will drive US interest rates up through the roof and the value of the US dollar (UUP) down. Brokers love the massive stock market volume this generates because they vastly improve profit margins.
Covid-19 is rapidly collapsing from its fourth peak. Total US deaths exceeded the 1919 Spanish Flu 675,000 peak by the time it is all over. We passed all WWII deaths last year.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.
This is a bet that Morgan Stanley (MS) will not fall below $98 by the November 19 option expiration day in 14 trading days.
Here are the specific trades you need to execute this position:
Buy 37 November 2021 (MS) $95 calls at………….………$9.25
Sell short 37 November 2021 (MS) $98 calls at………....$6.55
Net Cost:……………………..….......….………..………….….....$2.70
Potential Profit: $3.00 - $2.70 = $0.30
(37 X 100 X $0.30) = $1,110 or 11.11% in 14 trading days.
If you are uncertain on how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
